Shares of Sigma-Aldrich Corporation SIAL touched a new 52-week high of $140.03 on May 29, eclipsing the previous high of $139.59, before eventually closing marginally lower at $139.30.
The lab chemical and life sciences company’s one-year return is roughly 42.4%, higher than the S&P 500’s total return of around 12%. Average volume of shares traded over the last three months is roughly 852.9K. The company’s long-term projected earnings per share growth rate is around 7.8%.
Driving Factors
Sigma-Aldrich’s significant investments in sales, marketing and research and development (R&D) initiatives are helping create demand for its products. It is also gaining from the acquisitions of BioReliance and Cell Marque.
The company plans to continue increasing its marketing, business development and R&D focus to fully leverage its sales force and pursue its growth efforts. Sigma-Aldrich is actively expanding its foothold in the Asia-Pacific region, especially in the fast-growing emerging markets such as India and China.
Sigma-Aldrich has leveraged its SAFC business into higher-growth life science research markets by revitalizing core product lines and adding new offerings through acquisitions and licensing arrangements. The SAFC division has expanded production at the Arklow facility in Ireland to manufacture new pharmaceutical grade products. Also, it recently completed the expansion of its St. Louis facility to enhance the production of commercially used antibody drug conjugate.
The St. Louis facility is awaiting final confirmation and is anticipated to commence commercial production as scheduled, in third-quarter 2015. Once online, customers can avail all the facilities, starting from discovery to commercialization under one roof.
Sigma-Aldrich, which carries a Zacks Rank #3 (Hold), is looking forward to join Germany-based Merck KGaA. The acquisition of Sigma-Aldrich by Merck KGaA, which is subject to specific antitrust and government approvals, and other closing conditions, is expected to close by mid-2015.
The merger will create a big player in the $130 billion global life science industry. The integrated company will be able to cater life science customers globally with a highly attractive set of established brands and an efficient supply chain that can facilitate the delivery of over 300,000 products. The customers will benefit from the offering of a vast array of complementary products and capabilities.
Other Stocks to Consider
Better-ranked stocks in the specialty chemicals space include Ferro Corporation FOE, Chemtura Corporation CHMT and Flexible Solutions International Inc. FSI. While Ferro sports a Zacks Rank #1 (Strong Buy), both Chemtura and Flexible Solutions carry a Zacks Rank #2 (Buy).
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